It's me, Ben.

And today's question is specific to the United States.

How does the Affordable Care Act work, and what does it do?

Although its full name is the Patient Protection

and Affordable Care Act, you've probably

heard it just called the Affordable Care

Act, or Obamacare, or the ACA.

It's called Obamacare because President Barack Obama signed

it into law on March 23, 2010.

But what does it actually do?

Let's look at the basics.

Health care in the United States has some serious long term

issues.

First, there are millions of uninsured people.

Second, people who do have insurance

tend to pay more for it than they

would in other comparable countries.

The ACA aims to fix these issues by making affordable health

care available to more Americans.

I mean, that's a good idea, right?

To do this, the act makes some pretty big changes.

But although the act make some big changes to insurance,

these changes phase in over time instead

of happening all at once.

A lot of things will also stay the same.

For example, if you already have health insurance that you're

happy with, you can keep it under this law.

And children under the age of 26 can stay on their parents plan.

If you already have Medicaid coverage,

then you're going to stay on that too.

Or you can if you wish.

In fact, many states are expanding

Medicaid to cover more people.

So now, let's talk about what's changing.

There are several things.

First there's this thing called the individual mandate.

Most Americans will be required to have

some form of health insurance.

This is a sweeping change for a country with an estimated

30 million uninsured residents.

But how do you enforce something like that?

By 2014, everyone without health insurance

will need to pay a small fee.

During that year, for instance, the fee is going to be $95 per

adult, $47.50 per child.

The maximum a family will pay in 2014 is $285.

Now, those numbers are over the whole year, not month by month.

To make sure that people can find affordable insurance,

the ACA creates what are called Health Insurance Marketplaces.

These are virtual spaces run by the federal government,

or by your state, where customers

can see different plans and prices offered

by insurance providers.

So ultimately, this might allow you

to qualify for lower premiums, depending

on your income and your family size.

And regardless of what kind of insurance you have,

insurers will no longer be able to deny or revoke

coverage for preexisting conditions.

And women won't have to pay more than men for insurance either.

Finally, right?

Insurance will also cover preventative care.

So this would be stuff like mammograms,

and checkups, and screenings, and so on.

Then there's the 80/20 rule.

Insurers will generally be required to spend at least 80%

of the money they get from premiums

on-- wait for it-- actual health care.

If your insurer spends too much on overhead,

then you're going to receive a rebate.

Finally, the laws also require companies to publicly justify

rate increases of over 10%.

And they are banned from imposing lifetime dollar limits

on benefits.

This act also affects your employer,

whether you work for a large company or a smaller company.

A smaller business, one with less than 50 employees,

can visit the small business health options program,

or-- get this-- SHOP.

Right?

A government loves an acronym-- to compare and purchase

affordable health plans.

Additionally, some of these businesses

might be eligible for tax credits

if they get coverage through SHOP.

The rules are a little bit different for bigger

businesses.

In 2015, they have to make what's

called an employer shared responsibility payment if they

don't provide insurance meeting a minimum value standard,

or if one of their employees gets a better

deal in the individual marketplace.

Since states are implementing the act in different ways,

it's very important for you to check

on the specific plans of your home state.

So that's it.

If you'd like to learn more specifics about the Affordable

Care Act, check out www.healthcare.gov

for more information.

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